February 26, 2016

A bill to double Oregon’s renewable energy mandate is headed
for a vote as soon as Wednesday in the state Senate, where it faces an
uncertain fate.

The Senate Committee on Business and Transportation voted
3-2 Monday afternoon to pass an amended version of the bill out of committee.
Committee chair Sen. Lee Beyer, D-Springfield, wrote the amendment in an
attempt to address concerns that the bill, which was negotiated behind closed
doors by the state’s two investor-owned utilities, environmental groups, the
renewable energy industry and Citizens Utility Board of Oregon, will be costly
to consumers and businesses.

Beyer said the amendment strengthened the role of the Public
Utility Commission, in response to criticism the earlier version would have
weakened commission oversight.

Utilities objected to a provision in the amendment that
would lower the annual cost cap for the renewable energy mandate from 4 percent
to 3 percent. The existing renewable energy mandate allows utilities to ask the
Public Utility Commission to approve rate increases based on costs incurred to
meet the law.

“I’m not sure why changing it advances the policy now,” said
Scott Bolton, a vice president at PacifiCorp.

Ry Schwark, a spokesman for PacifiCorp, said he expected the
bill might still undergo changes. “Since this now will likely need to go to
conference, much will depend upon what comes out the other end of that
process,” Schwark wrote in an email.

Beyer’s amendment also expanded the types of energy the
utilities could use to meet the renewables mandate to include certain
hydropower projects, biomass and power plants that burn municipal solid waste.
That provision did not appear to be controversial.

Beyer was also trying to shore up support for the bill after
news reports last week that Gov. Kate Brown’s administration silenced state
energy regulators who critiqued the bill, and that those regulators had not
received enough information from the utilities to vet cost projections for the
bill.

“There was lots of concerns expressed in the press and
everybody else about how this bill got here and what it did and whether the
regulator was left out or not,” Beyer said on Monday.

House Bill 4036 would double Oregon’s existing mandate to
increase renewable energy and require Portland General Electric and PacifiCorp
to use renewable power sources such as wind and solar to serve at least 50
percent of their customers’ energy demand in Oregon by 2040, up from the
current state mandate of 25 percent renewable energy by 2025.

The bill would also require the investor-owned utilities to
stop using coal to serve Oregon customers, but there are questions about
whether the bill would actually do much to impact the phase-out of coal power
in Oregon. Portland General Electric has already committed to close Oregon’s
only coal plant, in Boardman, by 2020, and Beyer said the bill would have a
greater impact on the types of power utilities use to replace coal.

Beyer invited Susan Ackerman, chair of the Public Utility
Commission, to testify before the committee on Monday, something Senate
Republicans had called for last week.

Ackerman said the Public Utility Commission had long
considered a carbon cap-and-trade system to be the most efficient way to reduce
greenhouse gas emissions. Lawmakers introduced a bill to create a cap-and-trade
system this session, although it seems to have lost momentum and is assigned to
the budget writing Joint Committee on Ways and Means.

Ackerman said she was concerned that if the renewable
mandate bill passes, it could use up the political capital that would be
necessary to pass cap-and-trade legislation.

Ackerman also used her testimony Monday to respond to
respond to a news report that Brown’s administration had muzzled the Public
Utility Commission.

“That is simply not the case,” Ackerman said.

Emails released by the Public Utility Commission showed
Brown’s staff instructed the agency earlier this year not to go public with
talking points they had prepared listing concerns about the bill, specifically
that it would be expensive to consumers but do little to reduce carbon
emissions. PacifiCorp has estimated the increased renewable energy mandate
would cause its rates to increase by less than 1 percent annually, although
critics have noted that estimate only went through 2030. Portland General
Electric projected the bill’s costs through 2040 and estimated the legislation
would cause rates to rise by an average of 1.5 percent annually.